A pair of conditional orders known as one-cancels-the-other (OCO) instructions specify that if one order executes, the other will be immediately canceled. On an automated trading platform, an OCO order sometimes combines a stop order and a limit order. The other order is automatically canceled when the stop or limit price is reached, and the order is executed. OCO orders are used by seasoned traders to reduce risk and enter the market.
Order-sends-order (OSO) circumstances, in contrast to OCO orders, cause the execution of a second order rather than its cancellation. One can trade more safely by reducing risks or locking in possible profits with an OCO order.
Additionally, one can initiate or exit positions without having to have a bullish or bearish bias, hence having greater flexibility. OCO orders may also provide traders with peace of mind if they don’t want to monitor market action every day or don’t have the time to do so.
